patent troll

patent troll

An organization that uses its patents to generate revenue without manufacturing the products that the patents pertain to. The patents are often purchased from a third party, which may be bankrupt or no longer interested in bringing the product to market.

Also called a "non-practicing entity" (NPE) or "patent assertion entity" (PAE), which are less denigrating, the patent troll looks for infringers that have invested heavily in the product and often has to threaten them with or actually instigate a lawsuit in order to obtain licensing revenues. Companies that are involved in the business that the patent covers may indeed sue others for patent infringement, but that does not make them a patent troll. A patent troll is a holding company that buys patents based on their potential profitability if enforced. See Internet troll.

Secured by Unified provides a smart solution for startups that have been lacking an efficient, effective and affordable way to deter against frivolous litigation from patent trolls," said Application Developers Alliance Acting President Jake Ward.

As such, adjusting the length of the patent to more closely match the nature of the industry such as in software would allow the inventor to capture their profit share while concurrently eliminating the likelihood of patent trolls being able to capitalize on old patents to hold firms hostage for payouts or jury verdicts.

74) The effects of this surge in patent troll litigation on innovation and the economy are still disputed, but recent scholarly research suggests that these practices are inflicting a substantial, unseen "tax" on software and other products.

If a defendant is sued by one of these patent trolls, the alleged infringers do not have the usual retaliatory mechanism--the ability to assert their own patents in return--because the patent troll does not sell any products or offer any services which could infringe.

The law also allows the court to consider if the license fee is reasonable in light of the infringement and if the patent troll has a history of sending vague, threatening letters to companies over the same patents.

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